People that end up with large amounts of wealth tend to have similar habits. In discussing wealth, I’m talking about people that end up with enough money to do whatever they want. These are the multimillionaires and billionaires that have made a habit out of creating large amounts of wealth.
The following are the common traits I have seen in my studies of the wealthy over the past twenty years.
- They are serial entrepreneurs.
- They buy, create, and build assets.
- The wealthy create multiple streams of income.
- They’re great at inspiring other people.
- People skills.
- Emotional intelligence.
- They never quit.
- Business is their primary game and hobby.
- They put a high value on their time.
- They value capital and don’t waste it.
1. They are serial entrepreneurs.
The wealthy become that way because they are continuously coming up with business ideas and launching their best ideas. Most of the wealthy don’t think in terms of getting a job or having a career they are serial entrepreneurs thinking in terms of businesses, products, technology, and customers. Even the wealthy that do have careers generally have them as executives or bankers that eventually rise to the level of CEO. The wealthy have the habit of wanting to found a business, run a business at the highest level, or invest in a business. The wealthy have the habit of business in all its aspects.
2. They buy, create, and build assets.
The wealthy have the habit of building assets. They will create businesses, products, software, technology, websites, or real estate developments. The only way to get wealthy in the first place if you’re self-made is to create things of value. You’re wealthy when what you own has value. Net worth is derived from assets and to have them they must be bought, built, or created. The wealthy have the habit of buying, creating, and building things of value. In doing so they also create value for their employees, investors, customers, and governments they pay taxes to.
3. The wealthy create multiple streams of income.
The wealthy don’t rely on just a paycheck from a job, they have multiple streams of income. Based on IRS reporting the average millionaire has 7 streams of income. In 2015, the IRS published a research study titled Over the Top: How Tax Returns Show that the Very Rich Are Different from You and Me, the study revealed most millionaires have seven streams of income.
The wealthy make a habit out of creating these seven diversified streams of income.
- Capital gains from asset sales.
- Dividend income from stocks.
- Interest payments from bonds.
- Rental income from real estate.
- Business income.
- Earned income from a career or consulting.
- Royalties and intellectual property income.
4. They’re great at inspiring other people.
To become wealthy they had to inspire other people to come along with them on their journey. The wealthy are great and getting other people’s buy in on their visions for creating businesses. They inspire others to invest money, time, and energy in building something meaningful. They show people what’s in it for them.
5. People skills.
The wealthy tend to have great habits for dealing with people. They are skilled in managing people, making people like them, and people also tend to trust them. Wealth can only be built and kept if people believe in their integrity and morals. The wealthy tend to be charismatic and interesting to others. Almost all wealthy people are great public speakers.
6. Emotional intelligence.
Wealthy people almost all have high IQs, but more importantly they have high EQs as well. Emotional intelligence can be a more important habitual behavior than simply being smart. Emotional intelligence allows people to have the self-control and self-discipline to moderate their emotions along with their ego enough to be both productive and manage their impulses. Emotionally immature people don’t tend to build wealth as life itself becomes a struggle.
7. They never quit.
The wealthy share one trait in common, they didn’t quit until they succeeded. While perseverance doesn’t guarantee success, quitting does guarantee failure when you stop trying. You increase your odds of success when you try one more time. The wealthy have the habit of perseverance and trying one more time whether they win or lose. Henry Ford’s first two car companies failed but his third one succeeded. Few understand that you must get through your failures to get to your big successes.
8. Business is their primary game and hobby.
The primary sport and hobby of the majority of wealthy people is the game of business. Their passion is winning in their industry of choice, it’s a sport to them. Their favorite game of choice is their business and it can be what they even do for fun. That’s what most people don’t understand is that the wealthy are so passionate about their own business that their line between work, games, and hobbies blur together with little defined boundaries. They enjoy what they do so much of it doesn’t even feel like work. The wealthy have a habit of gamifying their business ventures and have ways of keeping their own internal scorecard for when they win and lose.
9. They put a high value on their time.
Time is one of the most highly valued asset of wealthy people and they have the habit of spending their time wisely. Wealthy people put a high value on their time and use it wisely in high value activities to move them toward their financial goals incrementally. The wealthy realize time is a limited resource and it can’t be replaced once it’s wasted. Rich people can buy time by paying others to do activities that they don’t like or consider low value uses of their valuable time, but they can’t get back the time they use. How wealthy you are has a high correlation on what you spend your time on and how well you manage it to optimize financial results.
The wealthy have the habit of investing the majority of their time in wealth creating activities.
“He who works all day, has no time to make money.” – John D. Rockefeller
10. They value capital and don’t waste it.
The wealthy have the natural habit of first placing a high value on money and not wasting it, then evolving into placing a high value on capital and using it wisely. Capital is the life blood of both creating and growing wealth. The wealthy see capital as something to be earned, borrowed, invested, managed, and multiplied. Average people see money as just something to be earned and spent with no retention. The middle class just see debt as a tool for getting depreciating assets they want, the wealthy see debt as tool for leveraging assets and building wealth. The wealthy have the habit of using capital to build assets and create a high net worth.
The more of the habits you share with the wealthy the greater the odds of becoming wealthy yourself over time.